Observations focused on the problems of an underdeveloped country, Venezuela, with some serendipity about the world (orchids, techs, science, investments, politics) at large. A famous Venezuelan, Juan Pablo Perez Alfonzo, referred to oil as the devil's excrement. For countries, easy wealth appears indeed to be the sure path to failure. Venezuela might be a clear example of that.

While everyone was watching the Chavez show, another interesting one was developing in Venezuelan science, which made the fascist science comissars come out of their caves to cry right-wing conspiracy as usual.

It all began with a letter written by the head of the Venezuelan Academy of Physical, Mathematical and Natural Science published in the prestigious journal Science, published by the American Association for the Advancement of Science. The letter addresses the main problems facing Venezuelan Science under Chavez. You can see the original here, but since it has little waste here is the full text:

The Venezuelan Academy of Physical, Mathematical, and Natural Sciences would like to share with the international scientific community our fears for the present and future fate of science and higher education in our country. A number of worrisome recent events and our interpretations of their implications motivate our concern:

1. The president of our country has stated what he believes science should be in Venezuela and has created his own initiatives for workable lines of scientific research (1).

2. At all levels of the national scientific establishment, inexperienced professionals with little scientific or technical knowledge or background have been appointed to positions of authority. They have been chosen on the basis of their loyalty to the political party in power. This approach precludes a constructive dialogue with the R&D community and curtails academic freedom of research.

3. The Ministry of State for Science, Technology, and Intermediate Industries controls discretionary use of resources collected from the private sector (2). Some of these resources, which were previously allotted to researchers according to the nature and quality of their research proposals, are now being centralized and distributed according to the “social aim” of the research proposal.

4. The government has decided to create some 40 new universities but has not published a plan to provide them with suitable academic staff.

5. Universities and centers of research have been subjected to drastic budget cuts, which severely affect most current research programs. Restrictions have been imposed on the acquisition of scientific literature and information as well as
of access to Internet (3).

6. The loss of intellectual capital to the United States, Canada, Mexico, Brazil, France, Spain, and other countries has accelerated (4). Young scientists, technology experts,
physicians, and engineers are leaving the country. The process started in 2003 with the firing of some more than 800 researchers from the Venezuelan Institute of Petroleum Research.
7. We believe that Dr. Raimundo Villegas, an emblematic researcher of Venezuela and founder of the Institute for Advanced Studies (IDEA), a wide-scope research institute,
was forced into retirement by the Directory from his post of tenured professor of IDEA. His departure was accompanied by the cessation of IDEA’s support of the Latin American Academy of Sciences (ACAL) (www.acal-scientia.org/); this support was stated in ACAL’s foundation charter. ACAL has an office in Venezuela that has been headed by Dr. Villegas since its creation 25 years ago.

8. Dr. Jaime Requena, who had applied for retirement, was instead fired from his tenured post at IDEA. This appears to have been a result of a personal decision of the Institute Director, as it occurred without the expected and due legal
procedures.

The above-mentioned observations represent just a fraction of the many actions that clearly reveal an aim of the government to control all of the national scientific activity and the higher education system, putting Venezuela’s scientific activities at risk.
References
1. B. Casassus, Science 324, 1126 (2009).
2. Gobierno Bolivariano de Venezuela, Fonacit;www.fonacit.gob.ve/locti/.
3 Gaceta Oficial Numero 38.145, 25 March 2009.

Because of this letter the journal asked Barbara Cassasus to look into the matter and in the same issue in which the letter appeared last Thursday, Science published this article on the travails of Venezuelan scientists under Chavez written by Cassasus. The article includes the drop in publishing by Venezuelan scientists, Chavez naming Lt. Colonel Chacon with no prior experience in science as Minister and admonishing him “put the screws” on the scientists as well as the firing of Jaime Requena when he requested his retirement from IDEA, a scientfic research institution.

I have written about some of these topics before including one Requena’s firing. In the article in science the other Chacon (not related), Prudencio, the Comissar of Chavez at idea repeats his lies that Requena was fired because: 1) He worked at two institutions (a University Foundation and IDEA at the same time 2) He ordered a software that benefited him personally and 3) He left work a few times without permission from his supervisor.

Chacon is a good Comissar of the robolution and believes that a lie said many times becomes the truth. In fact, he somehow found out about my post on the matter and dared put a comment with the same old lies. To put these lies aside, once and for all, on the charge that Requena worked at two institutions at the same time, I have uploaded two files to the web: Requena’s letter of resignation in January 2007 and his severance pay receipt a couple of weeks later, which clearly prove that Requena quit his job at the Foundation. I have also uploaded the terms of purchase of software from University which includes the software that Requena helped design (he used it in his research on the productivity of Venezuelan science) which clearly states that only the University benefits from the software and not those that helped develop it. Maybe Chacon wanted him to use a pirated a copy?

Finally, the third charge is absolutely ridiculous and shows the clear malice and bad faith behind Requena’s firing: Nobody fires a tenured researcher near retirement because he left work without telling his supervisor. This would be a first in Venezuelan science.

But the most remarkable part of the story was that Prudencio Chacon and the Vice-President of IDEA Miguel Angel Perez Pirela went on the Government’s propaganda channel VTV and put up the most absurd and hysterical (not for being funny, but for the hysteria they showed) performance of their lifetime. By the way, the information I have is that Perez Pirela, who has no science background and claims to be an expert on bioethics, gets paid not only by IDEA, but also by the Foreign Ministry and the Presidency of the National Assembly, besides having a car and driver. I wonder if he will be fired for that?

In any case, Chacon first came on and told us what a wonderful institution he presides at IDEA, whose object is not to publish, but has a new modern (??) concept of science whose purpose is to give service to the people, solving their problems so that they will have better quality of life. Clearly, this in no way describes science and the quality of the BS in some sense proves part of the points of the letter above by the President of the Academy.

Then came on the second in command, sub-comissar I guess must be his position, and referred to the article in Science. First he pointed put that it was a journalist who wrote it for Science. Then he explains that Science is a medium for propaganda for American science and which does not have much importance in the world of knowledge. He even dared say that at some point in time, Science was an important and significant journal, but has lost its audience, which is patently another lie, a big one at that. Then came the typical Marxist/Chavista dialectic of disqualifying Science by attaching it labels when he said that Science responds to something like ” the most reactionary north American right wing” and was clearly wrong on everything. He then proceeded to make the connection to the same reactionary right wing in Venezuela via the Academy of Sciences and the Venezuelan Association for the Advancement of Science (which as far as I know encompasses 99% of active Venezuelan scientists). He even said something to the effect that the publication of the letter was proof of the conspiracy of the endogenous right and the imperialist right backed by obscure reactionary interests that only want to….yes! destabilize Chavez’ Presidency!

At this point, the little rabbi (Rabinito),as he is called behind his back, raised his voice and started shouting why the Science article was wrong. He said Venezuela had the highest spending per capita in the world on science, that the drop in publications was not important, that is not how the revolution measures it, but represents an oligarchic methodology so that the great centers of capital can maintain control over knowledge. He then talked about the thousands of scientists (!!) that Chavez’ Government has incorporated into science. He claimed that IDEA went from 10 researchers to 110 since 1999. (He did not say that even students and technicians and even the person that feeds the rats are now called scientists)

I could go on, but I am sure you get the picture with the above distortions and lies by the two of the scientific Commisars of the robolution. I am not sure who watches VTV in mid-morning on Friday, but these two guys had nothing better to do than to try to take advantage of VTV’s 4% rating to convince them that everything is peachy in Venezuelan science and the scientists are a bunch of liars.

A true charade and hysterical performance that went on for a while, I hope somebody puts the video on the Internet

Well, it is hard to know what is going on. After inviting to a debate, which a group of the visitors to the Cedice Conference accepted, Chavez seeemed to backtrack, but later accepted again. But now that he has heard that the debate will be him versus Mario Vargas Llosa, Chavez backtracks again. He apparently wants to debate all of them at once and not Vargas Llosa, so he claims the intellectuals backtracked.

I can blog again, since Chavez also backtracked on his four day Alo Presidente. It is just the usual, Chavez going on TV anytime he feels like it, but not continuously

People thought I was kidding when I said that Chavez was planning to celebrate the ten years of his program Alo President with a four day program. Well, it has started. To top it all off, it is not Alo Presidente, which is carried only by his party’s TV channel VTV, but it is in “Cadena”. For those who still don’t know what that means, it means that all TV stations have to broadcast him (chained!) as long as the “Cadena” is on. Democratic, no? Of course, there is no right by any opposing group to speak afterwards and reply or anything like that. That would be destabilizing propaganda.

If Chavez does indeed speak for four days in a row and keeps the forced broadcast on, it will be another milestone in his dictatorship. The Devil has no plan to post until the Cadena ends. If it goes into VTV alone, that is fine, only fanatics and empty minded people can watch VTV for more than five mniutes.

Chavez began his program criticizing the garbage problem in the West of Caracas. Funny, his party has ruled over that district for the last ten years. What’s his excuse? He also complained about the plants that are not watered. Maybe he can have cameras installed all over the country so that he can report all the things that don’t work to his subordinates. He may also notice that way that blackouts are common and maybe he can call the police every time he notices a crime on camera. Can you imagine the cops laughing at him when he calls and asks them to go over and check the crime out?

What he is saying is a tribute to the incompetence and failure of his Government.

–Iris Varela urges the President to name a regional Vice-President for Tachira state and all other states that have an opposition Governor.

Jeez, wouldn’t it be easier to not let them run?

–After Chavez said yesterday Brazilian companies were exempt from nationalization, Aregntina’s Cristina Fernandez complained about the discrimantory treatment between the two buddy countries. Venezuela explained there was no discrimination and Argentina said it was “satisfied” with the explanation.

I guess Cristina was reminded by Canciller Maduro that Venezuela paid Techint for Sidor over twice what Chavez said the company was worth and assured her the recently nationalized Argentinean pipe and briquette companies would be equally overcompensated.

–And the Head of the consumer protection agency is asking for someone to be jailed in the case of the cars owned by Globovision owner Zuluaga. Meanwhile Minsiter Assami assures us that something crooked was going on.

I don’t know if Zuluaga violated some rule or regulation or not, but what these guys don’t seem to understand is that they only go after opposition people. Clearly, if the Government only allows colonoscopies on opposition members, the incidence of colon cancer on Chavistas will drop to zero. I mean, whatever happened to the investigation on the Maletagate cases? The Citibank building? Papi, Papi in Sucre? Shoudl I go on or you get the idea?

–But in any case the problem will be solved next week, when according to Deputy Sanguino the National Assembly will approve a Bill to regulate the price of cars.

Fantastic! Cadivi approves no dollars for making cars, forcing companies to import parts at the swap rate price and companies will be forced to sell the cars as if they had imported parts at one third the price. These guys really get it!

–And in State owned company Bauxilum, Chavismo lost its control over the union to former Causa R leader Morocoima who is now an independent, just when Chavismo has called for an offensive to take over all unions in Guayana.

I wonder if Chavez’ threat last week to the unions to fire them all like he did in PDVSA if they gave him trouble had something to do with this.

–And when a third case of food poisoning took place this week in the Ministry of Education’s food program this week, the Minister immediately came up with an explanation: “Sabotage!”

Fortunately, half of Venezuelans oppose the Government so that they can always find someone to blame for their incompetent management.

Too many questions surrounding this point. Will he go to the bathrrom? Will there be commercials when he does it or just an empty chair? How many nationalziations will he announce in those four days? Does the whole Cabinet have to attend all four days? Who will be running the country? (Sorry, dumb question, nobody, as usual…). If Chavez drinks only coffee for four days, what will he be saying at the end of four days?

Well, if you thought you had seen and heard it all, now comes the National Assembly and changes the law very quickly to allow Chávez to mortgage the country. It is insufficient for him to receive loans from the Chinese in exchange for oil, which is a different form of mortgaging the country, but now Venezuela will get a loan from Brazil’s development bank Bndes in the amount of US$ 4.3 billion, guaranteed by Venezuela by fields from the Orinoco Oil Belt.

Even more clever for the Brazilians, the money will be used to finance projects (and pay debts!) being built by Brazilian companies in Venezuela and the first beneficiary will be Odebrecht, the Brazilian firm building subways systems around the country and which is owed a lot of money by the Chávez Government.

So, you can see who is the greater fool here. Certainly not the Brazilians, who take advantage of Chavez’ tightening cash flow to lend him money to pay for their own projects and in the worst case scenario, Petrobras will have (actually own!) a nice chunck of the Orinoco Belt. But, Brazil also gets an added bonus that the Argentineans buddies were denied: Chávez said that he will continue to nationalzie private companies right and left, but Brazilian ones will be exempt from nationalizations.

This is thus like a mafia deal, where you not only get the money, but also get protection in exchange for it. Not a bad working day for Lula in meeting with our President.

The deal clearly is bad for Venezuela, as it will allow Chávez to continue his spending spree and the continued destruction of the Venezuelan economy. Because it is clear that there is no plan surrounding the nationalizations either, it is just a matter of Chávez wanting more and more control over the economy. Chávez said yesterday that he still had money to nationalize more companies (now that he got 4.3 billion elsewhere), but gave no hint as to where his voracious appetite will take him this time.

Chávez actually thinks that he is making money by nationalizing companies and gave the example of CANTV, where he claims he made the purchase price in the three years since the nationalizations. Sure, because he did not buy CANTV, he stole it by forcing Verizon to take his offer, even if there was a higher one on the table.

But if he thinks that Banco de Venezuela will continue making US$ 100 million per quarter as he suggested earlier, he better get off that cloud. He should think more like Banco de Venezuela will be Banco Industrial in three years.

Because clearly Chávez fails to understand that economic growth and jobs can only be generated if you invest your money in new enterprises and he somehow thinks that by buying these enterprises he is generating profits for his Government. In fact, medium and long term he is destroying them, as the current state of Cemex and PDVSA already attest.

In the end Chávez is acting like organized crime does, making offers people can not refuse, buying protection and in the end guaranteeing the survival of the capo at the expense of the country.

But he thinks he is being smart, while the Brazilians are laughing all the way to the bank.

Lots to tell after a month away, but perhaps what has surprised me the month is the proposed new Electoral Bill which reduces minority representation and gives the Electoral Board (CNE) the ability to redesign voting districts at will.

I don’t plan to go into the details, it is really boring by now that this dictatorship still bothers itself with the formalities of preserving the idea that somehow there is a democracy in place in Venezuela. Who is Chavez sending a message to? Who belives him by now?

Whe you control institutions the way Chavez does and when the law is reinterpreted at will, why even bother? In fact, the most affected group is not even the opposition, who by now is used to the abuses, but pro-Chavez party Patria Para Todos (PPT), which will be seriously affected by the changes and will likely lose many of its Deputies if the new law is approved, which led the party to threaten to propose a referendum of the electoral Bill.

Clearly, Chavez care less about PPT. He tried once to force them to merge PPT into his party PSUV and gave in, maybe he will not give in this time around and will tell them to leave the Government if they don’t like it. Just think, bad enough to get used to ahving Ismael Garcia on the oppositon, who woudl want to welcome Aristobulo Isturiz or some of the other PPT leaders?

But this is much like lying day after day about everything: The Government is not happy controlling 99%, it wants to control everything, just in case. And what motivates this Electoral Bill is the thought, God forbid! that the opposition could get some 30 or 40 positions and debates in the National Assembly could get noisy, after four years of total control of discussions and Bills.

Ths, make some small chnages, give the CNE even more power to manipulate than it does and voila!, the opposition will not get more than 15 or 20 positions if the votings districts are redesigned properly.

But why bother? How long does Chavez want to maintain the charade that his revolution has anything to do with a democracy? And what for? Chavez always had Dictatorial intentons, which he has only expressed fully in the last few months, but somehow he thinks someone somehwere needs to be convinced that he is not.

So, we will be distracted with this Electoral Bill, PPT will put up or shut up and in the end Chavez will do whatever he wants like he has done in the last few years. The same minority representation that allowed all of the parties that backed Chavez in 1998 to thrive in the much derided democarcy of the IVth. Republic will be dead, insuring that Chavismo will be even more permanently encroached in power for years to come.

(Chavez from his plane: “Equality, equality, equality, the whole country equal to all of you”)

While some may think the above cartoon is a a parody, it isn’t. When you create no value all you do is redsitribute the wealth in such a way that everyone in Venezuela will be poor. Chavez is not only not creating wealth, but destroying it and the end result will be what the cartoon lampoons.

The Venezuelan Government announced yesterday that it had agreed to buy Banco de Venezuela for US$ 1.05 billion, a waste of money as the Government is likely to slowly destroy the capabilities of the institution as revolutionary managers are put in place. The amount is in fcat much higher as the Government will also give Banco Santander US$ 122 million in dividends at the official rate of exchange of Bs. 2.15 per US$.

Banco Santander makes out like a bandit in the deal, the Venezuelan baking system is not worth ten billions dollars as the transaction suggests. Additionally, Santander paid for the bank in its privatization some three hundred million dollars and in the Chavez years, it was making 50%-plus returns on equity.

Thus, despite what The Economist says that Venezuela is ranked 81 out of 82 for the enviroment for businesses, some businesses do better than others and Santander and its shareholders certainly did well getting out early. Well, hopefully getting out, as Santander will receive US$ 630 millions in July and the rest in two IOU’s for 210 million payables in October and December.

But perhaps Santander’s best deal is that it is getting money out, something that will get more and more difficult if oil prices do not rbeound. Were Chavez to nationalize the whole financial system, for example, you can be sure nobody would get paid. Of course, Santader leaves now in the hands of the revolutionary Government all of the databases of the bank, which will certainy make some people very nervous. I would be too, fortunately, I have not had an account there for years.

In another indication of either the incompetence or the corruption of the Chavez administration, CITGO and PDVSA were defrauded in the amount of US$ 200 to 560 million, depending on the source, by brokerage firm FTC Capital Markets. Both companies sent funds to FTC to be invested in fixed income securities and certificates of deposits, but instead the money was used to cover losses in FTC’s operations and/or invest in higher risk strategies.

Reportedly, Citgo has sued FTC Capital Markets to recover the funds, as FTC gave the company fake statements in order to hide the fraud. The company does not have the capital to respond for even a small fraction of the amount missing.

Where is the incompetence in all this? Simple, as noted by website Venepiramides, at the end of 2008 FTC Capital Markets had equity of barely US$ 1.1 million and it incurred in losses for 2008 of over four hundred thousand dollars. What was Citgo doing working with such a small outfit and sending hundred of millions of dollars to it? Either those managing the funds were extremely stupid and incompetent or they were getting paid to do so. Obviously, a lot of people failed to do their job and perform the required due diligence. Even local brokerage firms are required to have more capital than FTC did.

This is another example of what happens when there are no checks and balances. Chavez has allowed Rafael Ramirez to run PDVSA at will, losing the old controls and supervision. From suitcases to cases like this, Venezuelans get ripped off by the revolutionary Government everyday. Of course, nobody will be punished for this, so that the corruption, waste and mismanagement will continue.